A Master Franchisee, in Addition to Having the Right to Open

question 10

Multiple Choice

A master franchisee, in addition to having the right to open and operate a specific number of locations in a particular area, also has the right to ________.

• A) stop making royalty payments if its sales decline
• B) sell products made by companies other than the franchisor
• C) offer and sell the franchise to other people in its area
• D) use its own operating manuals to run its franchise outlets
• E) stop making royalty payments if it is losing money

---

Definitions:

Long-Run Exposure Risks

Risks that a business faces over an extended period that can impact its financial stability, such as exchange rate fluctuations.

Foreign Exchange

The conversion or trading of one currency into another currency.

Triangle Arbitrage

A risk-free profit that arises from discrepancies between three foreign currencies in the foreign exchange market.

Profit

The financial gain realized when the revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.